Bike to Work Scheme in Ireland

Cycling to work has become one of the smartest financial and lifestyle decisions for Irish employees. Thanks to the Bike to Work Scheme, you can save hundreds of euros on a new bicycle and accessories, while cutting commuting costs, improving your health, and reducing your carbon footprint.

At Irish Tax Hub, we help employees and employers maximise their savings under this scheme and avoid the common mistakes that reduce the benefit. This guide is your definitive resource on the Bike to Work Scheme in Ireland for 2025.

What is the Bike to Work Scheme?

The Bike to Work Scheme is a government tax incentive that allows employees to purchase a bicycle and eligible safety equipment through their employer, with the cost repaid via salary sacrifice.

Because the deductions are taken from your gross salary, you don’t pay Income Tax, USC, or PRSI on that portion of your pay. In practice, this reduces the real cost of your bike by up to 52% depending on your tax band.

👉 Irish Tax Hub Tip: Many employees assume the scheme just spreads payments over 12 months. The real benefit is that the repayments are taken from your pre-tax salary, significantly lowering your effective cost.

How Much Can You Spend? (2025 Limits)

• Standard bicycles: up to €1,250
• E-bikes (electric bicycles): up to €1,500
• Cargo bikes: up to €3,000

If your chosen bike costs more, you simply pay the difference.

Eligible Equipment

You’re not restricted to the bike itself. The scheme also covers essential commuting equipment such as:

• Helmets and safety gear
• Lights and reflectors
• Locks and chains
• Mudguards, panniers, and racks
• High-visibility jackets

Bundling bike + accessories together means you can claim the maximum value within the scheme’s limits.

Tax Implications of the Bike to Work Scheme

The core benefit of the scheme is tax savings - but how exactly does that work?

How the Tax Relief Works

• The cost of your bike is deducted from your gross salary (before tax).
• This lowers your taxable income, so you pay less Income Tax, USC, and PRSI.
• The amount you save depends on your marginal tax rate.

Example – Standard Rate (20%)

• Bike value: €1,000
• Income Tax saving: ~€200
• USC + PRSI saving: ~€80
• Net cost: €720

Example – Higher Rate (40%)

• Bike value: €1,000
• Income Tax saving: ~€400
• USC + PRSI saving: ~€120
• Net cost: €480

👉 Irish Tax Hub Insight: Employees in the 40% band can save more than half the retail price.

Payslip Impact

• Deductions are usually spread across 12 months.
• Instead of paying €1,000 upfront, your take-home pay may only drop by €40–€60 per month.

Employer’s Tax Position

• The scheme is tax neutral for employers.
• No additional Employer PRSI is due on the salary sacrificed.

Who Can Avail of the Scheme?

• Employees (full-time, part-time, fixed-term) if their employer participates
• Employers can offer it at no cost to the business

Benefits Beyond the Tax Savings

1. Health – improved fitness, reduced stress, healthier commute
2. Environment – lower emissions, less congestion
3. Financial – reduced fuel, parking, and public transport costs
4. Convenience – predictable journey times, no waiting for buses or trains

Common Pitfalls to Avoid

• Using the scheme before your four-year eligibility resets
• Picking an ineligible bike type or accessory
• Employer not administering the scheme correctly
• Not factoring in tax band thresholds

👉 With Irish Tax Hub, you can avoid these mistakes. We guide both employees and employers to ensure the scheme is set up and claimed 100% correctly.

Benefits for Employers

Employers who adopt the Bike to Work Scheme enjoy:

• Healthier, more engaged staff
• Reduced absenteeism
• Less demand for car parking
• A more sustainable workplace image

And it costs the business nothing extra.

👉 Our team at Irish Tax Hub works with HR and payroll teams to integrate the scheme smoothly.

How to Apply

1. Confirm your employer participates.
2. Select your bike and eligible accessories.
3. Employer pays supplier
4. Cost is repaid via salary sacrifice over an agreed period.

Done correctly, the tax savings apply automatically.

Why Choose Irish Tax Hub?

At Irish Tax Hub, we go beyond the simple rules. We help you:

• Calculate your exact net cost of a bike with our tax calculators
• Plan your purchase for maximum benefit (especially if close to a tax band cutoff)
• Combine the scheme with other reliefs for even greater savings
• Ensure employer compliance with Revenue rules

👉 Don’t just save on your bike - let us show you how to optimise your entire tax position.

Final Thoughts

The Bike to Work Scheme in Ireland is not just about cycling - it’s about smarter tax planning. By using your gross salary to fund a bike, you lower your taxable income and boost your take-home value.

Add in the health, lifestyle, and environmental benefits, and the scheme is a win-win for employees and employers alike.

🚴 Ready to start? Book a consultation with Irish Tax Hub today to unlock your maximum savings.